A popular master limited partnership exchange traded note has started to trade at a premium to its net asset value once again, highlighting additional risks associated with the ETN structure.

The JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ) was trading at a premium of around 3% late last week, with some traders attributing the run up to large option trades. The ETN had set an all-time high closing premium of 4.3%, according to the MoneyBeat blog at WSJ.com.

The issuing bank of the ETN halted new share creations due to the difficulty in hedging out MLP exposure, essentially turning the ETN into a closed-end fund. Consequently, premiums and discounts to net asset values can occur. [Master Limited Partnership ETN Trading at Premium After Creation Halt]

J.P Morgan has restricted the number of shares issued at 129 million on June 14, 2012 amid rising demand for AMJ as an alternative for yields. [Master Limited Partnership ETF: Attractive Yields with Risks]